Mary Claypool: Effects of sequestration

We have weathered the recession, survived the fiscal cliff and now many are struggling with the impacts of sequestration. Sequestration refers to budget cuts to particular categories of federal spending that began on March 1.

The cuts were enacted by the Budget Control Act of 2011 and initially set to begin on Jan. 1, but that date was postponed by two months by the American Taxpayer Relief Act of 2012.

The spending reductions are approximately $85 billion during fiscal year 2013, with similar cuts for years 2014 through 2021. Sequestration has touched the lives of the young, elderly, the working class, business community and public agencies and educational institutions — which must make adjustments to compensate for financial losses.

These cuts will have a negative impact on the economic recovery of states and local communities. Unfortunately, the sequestration cuts will have an impact on job creation, consumer spending and the funding of our education and health care systems. It has touched our lives in more areas than we could have known when this discussion was underway in Congress. Economist Paul Krugman estimated that implementation of sequestration could cost 700,000 jobs.

In California, some of the most significant cuts are being felt in defense with furloughs for around 64,000 Department of Defense civilian employees, resulting in payroll reductions of approximately $400 million for 2013. Army and Air Force operation funding in California may be reduced by $54 million and $15 million, respectively.

Head Start early education programs would service 8,200 less children. The Monterey County Office of Education has made adjustments that are intended to affect as few students and staff as possible. Elementary and secondary education would lose $87 million in federal funding, putting around 1,200 teaching jobs at risk, affecting 187,000 students and 320 schools.

Education for children with disabilities is scheduled to lose $62 million, federal funding for environmental protection is set to lose $12.4 million and there will be a $1.6 million loss in grant money for law enforcement and public safety.

Job search assistance programs that support referrals and placement will lose approximately $3 million, resulting in 130,000 fewer people getting the help and skills they need to find employment. Fewer child care dollars result in loss of care for 2,000 children, making it harder for low-income earners to keep their jobs.

Research agencies will face a 5.1 percent reduction and will issue 1,000 fewer research grants. This will affect almost 12,000 scientists and students, creating a significant impact on scientific research and a serious impact on our ability to develop technology and cures for disease in the U.S.

These state losses translate into losses at the local level in the form of fewer jobs, reduced hours, less expendable income, fewer resources for our children, reduced public services, and fewer dollars for home health care. As the cuts are implemented, we will cringe and agencies will make the necessary adjustments to lessen the impacts on our community and residents.

Mary Claypool is an adviser with Claypool Consulting and former executive director of the Monterey County Business Council. She can be reached at maryclaypool@sbcglobal.net or 917-3777.